Correlation Between Stillfront Group and Qleanair Holding

Can any of the company-specific risk be diversified away by investing in both Stillfront Group and Qleanair Holding at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Stillfront Group and Qleanair Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Stillfront Group AB and Qleanair Holding AB, you can compare the effects of market volatilities on Stillfront Group and Qleanair Holding and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Stillfront Group with a short position of Qleanair Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stillfront Group and Qleanair Holding.

Diversification Opportunities for Stillfront Group and Qleanair Holding

0.16

Correlation Coefficient

Stillfront Group  Qleanair Holding

Average diversification

The 3 months correlation between Stillfront and Qleanair is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Stillfront Group AB and Qleanair Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qleanair Holding and Stillfront Group is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Stillfront Group AB are associated (or correlated) with Qleanair Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qleanair Holding has no effect on the direction of Stillfront Group i.e., Stillfront Group and Qleanair Holding go up and down completely randomly.

Pair Corralation between Stillfront Group and Qleanair Holding

Assuming the 90 days horizon Stillfront Group AB is expected to under-perform the Qleanair Holding. In addition to that, Stillfront Group is 1.2 times more volatile than Qleanair Holding AB. It trades about -0.04 of its total potential returns per unit of risk. Qleanair Holding AB is currently generating about -0.01 per unit of volatility. If you would invest  2,324  in Qleanair Holding AB on September 3, 2024 and sell it today you would lose (654.00) from holding Qleanair Holding AB or give up 28.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Stillfront Group AB  vs.  Qleanair Holding AB

Stillfront Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stillfront Group AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Stillfront Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Qleanair Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qleanair Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Stillfront Group and Qleanair Holding

The main advantage of trading using opposite Stillfront Group and Qleanair Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stillfront Group position performs unexpectedly, Qleanair Holding can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Qleanair Holding will offset losses from the drop in Qleanair Holding's long position.

The idea behind Stillfront Group AB and Qleanair Holding AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.